Pacific Rubiales, Other Indicators Confirm Majors Embroiled In Bidding War For InterOil's Assets
Seeking Alpha
Writer Resource Arb
Disclosure: I am long IOC.
Last week, Pacific Rubiales (PRE) -- the $6 billion Columbian E&P company that owns a 10% working interest in InterOil's (IOC) PPL 237 -- hosted its analyst day. The company's comments confirmed not only that it intends to pursue an unexpectedly aggressive 2013 drilling schedule in PPL 237 but also that the supermajors are jostling against each other to buy a stake in InterOil's assets. PRE's commentary, in conjunction with several confirmatory articles released over the past two weeks, indicates that the interest levels and bidding activity for InterOil's resources and prospective acreage are much greater than the market is contemplating.
PRE is the largest independent oil and gas E&P company in Colombia. The company drilled 202 wells in the past seven years, it operates in five countries, and it is poised to generate $5 billion of revenue and $3 billion of EBITDA at $90 crude in 2013. On April 30, 2012, InterOil signed a binding heads of agreement with PRE whereby PRE could earn a 10.0% net participating interest in PPL 237, and on March 5, 2013, InterOil announced that PRE funded the full US$116 million cash payment due under the farm-in agreement. With a 10% working interest in PPL 237, PRE is more likely to be apprised of the current bidding activity for InterOil's resources and acreage than any other external entity or individual. [Read on here]
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